New retirement legislation comes into effect
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What is the main topic discussed in this episode?
The Clare Byrne Show on Newstalk. With Aviva Insurance. Now from today, any employee who wants to work until the age of 66, even if their contract says that they should retire at 65, has the right to stay in the job. The new rules will aim to close the gap between retirement and the age when you're entitled to the state pension on your 66th birthday. We're about to talk to Peter Cosgrove, Employment Expert and Managing Director of FutureWise on this. But if you have any questions, do get in touch with us now. 087 1400 106. Good morning to you, Peter. Good morning.
What are the new retirement legislation changes effective today?
This looks like a pretty straightforward change. Are there complexities in here that both employers and employees need to know about?
Well, firstly, there are certain areas like this, Defence Forces, the Garda, that are already saying you can work up to 70. So if you have those sorts of rules in place, they don't change. This is really trying to bridge that one year gap that a lot of people have between when their pension kicks in and when they retire. So the key thing to understand is you've a right to request to stay on. The employer has a right to say no in certain circumstances, let's say health and safety or something like that. But in general, it just gives employers who are employees who maybe want to work that little bit longer who can or who want to bridge that one year gap.
OK, so what happens if your employer says no and has a reasonable reason for saying no and you must retire then at 65? You don't get the state pension till 66.
Yeah, I mean, it would be rare that they would give a reason that wouldn't be very fair. And this is what this is going to do. So it would have to be a reason that it was actually going to be unfit for you to stay and work. So the onus is very much on the employer now. And the downside to the employer is going to be a bit more bureaucracy for them because they're going to have to, if they did want to stop this, they'd have to kind of give you the paperwork and realise why you couldn't do this. So in general, it's very much in favour of the employer.
And if they don't allow you to stay on or give you reasons why you can't stay on, they could be liable to be fined, right?
Essentially, that's what the Act is in place. It's very much a protection. I mean, it removes one year income gap. I mean, for employers, as I said, it'll be a bit more bureaucratic. And maybe for younger workers, we'll feel like, my God, will those older workers ever leave? There's probably a little bit they're probably wondering because this is only going to go up and up because they say the average person born today is has a 50% chance of living to 100. So it's kind of hard to see us in the future of retiring at 65 if our work life goes on a lot longer.
So this is the thin end of the wedge, you say, that the state pension age is likely to go up again.
I mean, it's been mooted already and politically it has not been a good thing to do. But eventually, as they look at the numbers down the road, it's very difficult for governments to do it because they don't want the negative press. But the reality is, if you talk to people in the kind of actuary world, They say that it's very hard for us to see how this is going to continue if we don't raise that wage.
So some questions coming in on the extension of the retirement age. I'm 64 next February. If I want to retire at 66, is there a notice period that I must give my employer?
What complexities do employers and employees need to consider?
So when do you start asking your employer?
What I say to everybody, this is this is like a kind of an act that has come in place that allows you to go to 66 instead of 65. How your employer deals with that could be very different. So, you know, you'll have an employment contract, you'll have kind of something around your retirement that will be in that might say three months, might say six months. But in general, the best thing to do is just engage with your employer. There's no surprises in this. They're going to give you, they're going to tell you what you need to know, but just be aware of it as you're coming up to the age.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:01–0:38
2
What are the new retirement legislation changes effective today?
0:38–3:04
3
What complexities do employers and employees need to consider?
3:04–5:32
4
What happens if an employer denies a request to work until 66?
5:32–7:48
5
How does the new legislation protect employees' rights?
7:48–12:09
Speakers
2 identifiedMore from The Claire Byrne Show
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